USD: The dollar will remain strong until the end of 2022 – Wells Fargo

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Wells Fargo analysts they continue to see further US dollar strength through the end of this year. They note that despite a more aggressive pace of tightening by foreign central banks, they doubt that international policymakers can keep pace with the tightening cycle set by the Federal Reserve.

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“Despite a more aggressive pace of tightening by certain international central banks, the Federal Reserve is likely to continue to lead the charge towards tighter monetary policy. As such, we continue to expect a stronger US dollar through the end of this year.” That dollar strength should materialize as the Fed raises interest rates by 75 basis points in September and continues to shrink its balance sheet.”

“We believe the dollar will strengthen against G10 and emerging market currencies, and will only peak as Fed policymakers begin to consider withdrawing rate hikes as the economy slows.” America enters a recession.

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Source: Fx Street

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